Lawmakers Put Port'sRail-Yard Plans on Hold

The Port of Portland keeps its option to buy the land near Troutdale,which cities envision for other uses

GRESHAM -- The Port of Portland will not be allowed to build a controversial truck-train freight yard near Troutdale for seven years.

Oregon House Speaker Karen Minnis, R-Wood Village, blocked the Port's rail yard proposal at the end of the legislative session. During discussion of the $100 million "Connect Oregon" transportation bill, Minnis added language to keep the Port from building its proposed rail yard on the former Reynolds Metals smelter site until 2012.

Although the move doesn't kill the Port's plan, "it certainly halts it," said Pat Egan, state affairs manager for the Port of Portland.

However, the Port will keep its option to buy the 700 acres now owned by Alcoa for about $18 million. It plans to close the deal by the end of 2006, said Carl Warren, the Port's director of business development. In the near term, the Port wants to build a 100-acre business park at the site.

"It still makes sense for us to buy that land, and we're still going to buy it," Warren said.

Alcoa bought the smelter in 1999 as part of its acquisition of Reynolds Metals. The property was listed as a pollution-contaminated Superfund site, and the smelter was aging and inefficient. Alcoa demolished the smelter and is in the final stages of cleaning the land for sale and redevelopment.

The Port saw it as an ideal location for a regional freight yard where trucks and trains could exchange containerized loads. It is served by Interstate 84 and the Union Pacific main line.

"The region desperately needs something like this," said Egan, noting that 8,000-foot trains now are expected to transfer loads on 2,000-foot tracks at the Albina yard, a process that can jam the main line for hours at a time. "Whether it's in Troutdale is a secondary question."

Opponents in Fairview, Troutdale and Wood Village worried the rail yard would hurt their area with too much traffic and too few good jobs. They had already developed plans for land along the Columbia River that mixed high-paying jobs with recreation-oriented development.

All three city councils passed resolutions opposing the rail yard. The mayors also said they would use their zoning power to block the development of a project they did not like.

Developers can sometimes trump local zoning laws by receiving "supersiting" power from the state.

Minnis' spokesman, Chuck Deister, said she decided to take action after "there were several attempts in other legislation . . . to give the Port supersiting authority."

Egan said the Port actually was trying to support a business-friendly bill that combined the permits required by a number of different agencies into a one-stop process for developers.

"I would not agree . . . that this was a supersiting bill," he said. "It didn't change anybody's decision-making authority."

The Port has withdrawn its request for a $17.5 million loan from lottery funds controlled by the Oregon Economic and Community Development Department. The Port planned to use the loan to buy the property.

Borrowing the money would cost the Port about $1 million a year in interest, Warren said. Because of the complexity of the project -- including community controversy about what should happen to the land -- the Port decided to buy the land with its own resources, Warren said.

"That's an interest expense I don't have to bear in an uncertain environment," he said. "I think we underestimated how difficult it would be to get to an agreement on what needs to happen there."